Nicholas Alvarez

System Design

#1 How to Perform Back-of-the-Envelope Calculations

Nicholas Alvarez
Nicholas Alvarez
December 8th, 2025
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Back-of-the-Envelope - Official Guidelines

Often times in System Design interviews, you are tasked with estimating system capacity of performance requirements using back-of-the-envelope calculations.

What exactly is a back-of-the-envelope calculation?

To make it simple, it is a simple equation you perform. Think of this concept like an estimate using whole numbers instead of being extremely precise. The answer is not going to be exactly 100% correct but it is a ball park estimate.

This is a calculation you can perform on the back of an envelope or on a napkin, hence the name.

A napkin with the word Smart drawn with an orange box around it point to 5 blue circles with the words Measurable, Realistic, Specific, Time Bounded, and Agreed written. The title at the top says Setting Goals. Used in conjunction to demonstrate making a back of the envelope calculation using a napkin.

These calculations are often done during the initial design phase before building any large system. The goal is to identify if we are over-engineering or under partioning for our design idea.

For example, the difference between a simple photo-sharing app with thousands of users and a large social media platform with millions of users will have different specs, so we must make a good upfront estimate before building.

A very important mental framework you'll need to know is: which pieces of the puzzle you need to plug into your equation?

Before we delve any deeper, it is very important we understand up front that mastering this skill will take lots of practice with different scenarios and various conversions. Your expectations should be that even after reading this blog, you will have to do a lot of practice to understand this concept fluently.

Identifying the pieces of the puzzle

The six key pieces of the puzzle you want to identify is a combination of these 6 building blocks.

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Summary

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